Big Tech is caught up in AI frenzy

Today's top stories

• The Federal Reserve will announce its decision on rates of interest at 2:00 p.m. ET/7:00 p.m. London time. Further details and reactions may be found here.

• New York police stormed the Columbia University campus and arrested pro-Palestinian protesters to quell unrest that has spread to campuses across the country and fueled divisions within the United States over the war in Gaza.

• Maritime experts warned that Yemen's Iran-backed Houthis are actually threatening merchant ships in the broader Indian Ocean after hitting a container ship well outside the Red Sea last week. Many shipping firms have switched to the longer path to avoid Houthi attacks on the approaches to the Suez Canal within the Red Sea and the Gulf of Aden.

Good evening.

Is artificial intelligence coming to your job?

The FT is today putting OpenAI's latest Sora video generation model to the test to evaluate its likely impact on jobs after a Big Tech reporting season dominated by an AI spending arms race.

Our tests on Sora, in addition to competitors Runway and Pika, give attention to animation, promoting and real estate, sectors which are more likely to feel the complete force of the brand new technology. The results are impressive, although circuitously comparable, not less than to date, to material created by real people.

Although AI continues to be in its infancy, it’s already dominating Big Tech's investment plans.

Amazon said yesterday that AI demand has led to an enormous jump in sales at its cloud computing division and that the corporate plans to spend big to support the technology. The company is vying with cloud computing rivals Microsoft and Google parent Alphabet for supremacy within the generative AI space, which has driven up spending on infrastructure reminiscent of data centers to support the technology.

Microsoft reported an analogous increase in cloud sales and AI spending last week, as revenue and profits got here in above estimates. Analysts are closely watching the performance of its generative AI assistant 365 Copilot, which has been integrated into its suite of productivity apps.

Like its competitors, Microsoft is struggling to satisfy clean energy demands while satisfying insatiable demand for cloud computing and AI. Today, the corporate agreed to support $10 billion in renewable power projects with Brookfield Asset Management that may bring 10.5 gigawatts of power generation capability online – the identical amount needed to power the equivalent of 1.8 million homes maintain.

Meanwhile, Alphabet, whose valuation surpassed $2 trillion after last week's results, said the Gemini era is now “in full swing,” citing its generative AI model for major languages. The company can also be considering charging for certain AI-powered search features in its premium services, which already offer a Gemini AI assistant in Gmail and Docs.

The company has been criticized for being slower than its competitors to commercialize generative AI – particularly within the context of Microsoft's $13 billion partnership with OpenAI and its ubiquitous ChatGPT program – despite the technology being developed by its researchers themselves was developed.

At Meta, boss Mark Zuckerberg was forced last week to defend a spending spree aimed toward making the social media group the “leading AI company on this planet.” Shareholders weren’t impressed, causing the corporate's shares to plummet.

However, technological development continues to progress. Meta's recently released Llama-3, together with OpenAI's upcoming GPT-5, is already testing the following frontier of AI: models able to pondering and planning, essential steps toward superhuman cognition in machines.

Meanwhile, the frantic activity is attracting the eye of regulators.

The UK Competition and Markets Authority last week expressed concern about alliances between Big Tech and AI start-ups. The CMA fears that incumbents could exploit AI firms' insatiable need for computing power to coach large language models by luring cash-strapped startups into their cloud services in exchange for a stake that would give them outsized influence the young firms.

The CMA is already reviewing Microsoft's collaboration with OpenAI, a deal that has also attracted the eye of antitrust regulators within the US and Europe.

Things to know: Economics in Great Britain and Europe

The “New Deal for Working People” promised by Great Britain. Work partysaid to be the largest expansion of staff' rights in a long time, might be weakened before the overall election.

The NHS England still needs three years to totally recuperate from the pandemic, held back by a scarcity of investment in hospital buildings and medical equipment, its chairman Richard Meddings told the Financial Times. He said the service can also be in a continuing battle against “the behaviors of a contemporary world,” including gambling and consumption of highly processed foods.

Voters in England and Wales go to the polls tomorrow at local and mayoral levels Choose. Here are Friday's results and their timing from Inside Politics' Stephen Bush (and for skilled politics geeks, here's his guide to the overnight results). The council's funding problems are a key issue.

The Eurozone economy Growth grew faster than forecast, reaching 0.3 percent in the primary quarter, because of a recovery in Germany, the bloc's largest economy, which rose to 0.2 percent growth from a 0.5 percent contraction within the previous quarter. Separate data showed headline inflation within the euro zone remained stable at 2.4 percent in April after 17 months of decline.

The European Union 20 years ago today expanded to incorporate 10 latest members. After a period of spectacular growth, these countries must now avoid losing their competitive advantage as living standards meet up with their western neighbors.

Meanwhile in GeorgiaIn the EU candidate country, the police took brutal motion against pro-democracy demonstrators who fought against pro-Russian politicians.

Interesting facts: global economy

The head of the World Bank warned wealthy countries against ignoring Africa while development budgets are strained by wars in Ukraine and Gaza.

Chief economic commentator Martin Wolf said the decline was notable global poverty would soon come to an end because the poorest countries struggle with the economic shocks of recent years. A major increase in funding for the International Development Association is urgently needed, he argues.

Eat and drinks Companies including McDonald's, Nestle and Coca-Cola said poorer customers within the U.S. aren’t any longer capable of absorb price increases, whilst wealthier consumers proceed to spend.

China's factory activity According to the official Purchasing Managers' Index, the economy grew for the second month in a row, led by rising output in high-tech manufacturing. However, industrial earnings data released on Saturday raised doubts in regards to the economy's momentum.

Fun fact: business

Europe is “sleepwalking” into dependence on Europe Russian fertilizersimilar to with gas, says the boss of Yara, one among the biggest producers of plant nutrients.

The EU is investigating 20 airlines for “potential misleading”. Greenwashing Practices,” specializing in claims that the carbon emissions of flying may be offset either by investing in environmental projects or using more sustainable jet fuels.

Europe's largest Automobile manufacturer are fighting falling demand and better rates of interest which are deterring consumers. The electric vehicle market has its own problems: Elon Musk closed the division that runs Tesla's Supercharger business and laid off tons of of employees.

The managing director of Ericssonthe Swedish telecommunications equipment manufacturer, criticized over-regulation, which he said was “driving Europe into insignificance” and undermining the region’s competitiveness.

Investors are starting to have a look at the prospect of a Trump Presidency 2.0. Asset managers are diversifying across asset classes and regions to “Trump-proof” their portfolios.

The working world

The Europeans have more time, the Americans extra money. Which one is best? columnist Simon Kuper takes under consideration the important thing aspects at the center of work-life balance.

Grosvenor, the Duke of Westminster's real estate company, makes an enormous bet flexible work spaces to satisfy demand in London's West End. It joins other landlords and office specialists who’ve increased flexible offerings to appeal to tenants preferring more hybrid working.

How will latest US rules prohibit its use? Non-compete clauses play out in contracts? Listen to the brand new Working It podcast.

Some excellent news

The intermittent nature of renewable energy Energy sources like solar and wind have proven to be a major hurdle in transitioning away from fossil fuels, but in keeping with the International Energy Agency, this might soon be a thing of the past: the price of battery storage will fall decrease by as much as 40 percent by 2030.